Nikkei slips from 3-month high amid ECB uncertainty

Reuters Staff

3 Min Read

* Sharp down after job cuts report; sentiment remains weak
* Defensives in demand, Softbank up 1.3 pct
By Dominic Lau
TOKYO, Aug 21 (Reuters) - Japan's Nikkei share average
pulled back from a three-month high on Tuesday, after the
European Central Bank quashed speculation about the form of its
bond-buying programme to combat the region's debt crisis.
Expectations that the ECB would take bold action to tackle
the euro zone sovereign debt crisis have helped the Nikkei
rebound 10 percent from a seven-week low touched on July 25. The
Nikkei is up 8.2 percent so far this year.
But the market is still awaiting further details of the
ECB's plans, and there are some signs of fatigue after the sharp
run-up. Investors buying into defensive stocks helped to support
the market.
The Nikkei dipped 0.2 percent to 9,157.20 in morning
trade, but held above i ts 26-week moving average at 9,149.52.
The benchmark inched up 0.1 percent on Monday, hitting a
three-month closing high for the second session in a row.
"The jury is out as to whether we come back after the summer
holidays, we will return to the old uncertainty that we saw
going into the summer holidays," said Stefan Worrall, director
of equity cash sales at Credit Suisse in Tokyo.
Worrall said investors would be watching for comments from
European policymakers after they return from holidays as to how
they would tackle the currency bloc's debt problems.
Sharp Corp shed 1.2 percent after the Yomiuri
newspaper said the embattled TV maker aims to cut 8,000 jobs or
15 percent of its global workforce, including 3,000 from the
sale of two TV factories in China and Mexico. Traders said Sharp
shares were best to avoid as the company had a long way to
recovery.
"People are going into defensive, domestic plays," a trader
at a foreign bank said.
Convenience store operators Seven & I Holdings Co,
Lawson Inc and FamilyMart Co Ltd were up
between 0.9 percent and 1.1 percent.
Mobile operators Softbank Corp and NTT DoCoMo
were also in demand, up 1.3 percent and 0.7 percent,
respectively.
The broader Topix inched up 0.1 percent to 765.20.
The market's recent rebound had further lifted the Topix's
12-month forward price-to-book ratio to 0.85, from a four-year
low of 0.8 hit in the first week of August, data from Thomson
Reuters Datastream showed. That compared with U.S. S&P 500's
1.9 and STOXX Europe 600's 1.36.